Bank of America is standing by Nvidia and some other key semiconductor players in 2025 even after another strong year for the sector. “In the first half, [artificial intelligence] investments and NVDA Blackwell deployments driven by US cloud customers sustain momentum in AI semis, wrote Vivek Arya. “However, in the 2H, interest could shift to less-crowded auto/industrial chipmakers on inventory replenishment and pick-up in auto production assuming a global economic recovery.” Semiconductor stocks are on pace for another winning year as AI investments ramp up and show no signs of easing. Nvidia is on pace to finish the year with a 172% gain, while Broadcom shares have nearly doubled, hitting a fresh high last week. Looking ahead, Arya forecasts that semiconductor sales will grow 15% to $725 billion next year, while memory sales should grow 20% year over year and outpace nearly 8% growth this year. Wafer fab equipment sales, however should grow a modest 5% due to China restrictions. “Despite the crowded nature of AI stocks, we still see a continued ‘arms-race’ between cloud … service providers, [total addressable market] expansion into enterprise on-premises and sovereign deployments, and continued pace of innovation in training … and inference,” he wrote. “However, AI stocks could potentially peak in 2H25E when investors start to get concerned about tougher YoY compares in 2026E following two years of 100%+ annual growth in AI silicon.” Beyond AI-leaders Nvidia, Broadcom and Marvell Technology , Arya anticipates significant tailwinds for flash-memory equipment leader Lam Research as capital expenditures recover. China export restrictions, however, present a near-term risk. AVGO YTD mountain Broadcom shares this year “We do expect [wafer fab equipment] to pick-up double-digit growth in 2026/27 assuming continued demand for leading edge logic/memory and advanced packaging,” Arya wrote. “Our top semi-cap pick [is] LRCX, but also continue to like KLAC , AMAT .” The firm also names On Semiconductor as a potential winner in the second half. Shares have underperformed this year, slumping more than 21%.
